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A 2018 co-op marketing report confirms that 70% of all available co-op advertising dollars were tied up in traditional media, while only 19% was in digital/social and 11% was dedicated to local events. The report featured data from a survey of over 2,700 “dealers, agents, franchisees, and distributors of national and global brands.”

Traditional media has the biggest gap between available co-op dollars and the percentage that is actually used. If we consider this a simple supply and demand discussion, brands are supplying co-op dollars for media channels that aren’t in as much demand as others. Because of this, retailers said that the top reason they aren’t using co-op is that “marketing tactics I use aren’t covered.”

Co-op programs for many brands appear to be out of touch with actual consumer behavior and which media local retailers are looking to utilize for their marketing. It is possible that co-op is being neglected as brands focus efforts on understanding the digital landscape at the brand level and co-op strategies will follow. On the other hand, the challenges with co-op are many:

86% of local retailers said co-op is critical to their ability to execute local marketing. It’s evident retailers that allocate co-op funds to media channels that drive sales, in fact, benefit the brands bottom-line and directly increase market share for their featured product lines. Whether you’re a brand, you work with brands, or you work with local retailers (SMBs), all levels of the value chain need to understand co-op in order to drive local consumer awareness and local retail activity.

Covault streamlines the entire co-op approval, ad creation and invoicing process to drive real engagement in local markets with an informed allocation of funds to the right media channels. It’s about time we shift the balance of co-op funds to generate measurable value for brands, retailers, and their local customers.

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